5 Reasons Why Student Loan Forgiveness Is A Bad Idea
Zack Friedman Senior Contributor. CEO, Mentor (mentormoney.com). Bestselling Author, The Lemonade Life.
Here are 5 reasons why student loan forgiveness is a bad idea, according to a top Republican U.S. senator.
Here's what you need to know - and what it means for your student loans.
Student Loans
Sen. Roy Blunt (R-MO), the top Republican on the Senate Appropriations Subcommittee on Labor, Health and Human Services, delivered a detailed speech on why wide-scale student loan forgiveness is bad policy. Among his arguments:
First, Blunt notes that more than 80% of Americans don't have student loans. Why? They either paid off student loan debt or never went to college. There are approximately 45 million student loan borrowers and approximately 250 million adult Americans. Notably, 60% of student loan debt is held by households that earn more than $74,000 of income annually. According to Blunt, student loan forgiveness disproportionately benefits wealthier Americans. Are there individual student loan borrowers who are struggling financially? Certainly. However, Blunt notes that having the opportunity to attend college and earn a college degree, is an asset that on average leads to higher income. As an alternative to student loan forgiveness, Blunt would rather have Congress increase Pell Grants to lower the cost of college for students who are financially vulnerable. "The top 40% of American households hold 60% of the student loans," Blunt said. "The bottom 40% have less than 20% of the student loans. If you were going to talk about this at all, maybe you ought to talk about-maybe we should be talking about the bottom 40% of incomes, not the essentially the top 40% of incomes, [with] an across-the-board forgiveness of debt."
2. Biden doesn't have the legal authority to cancel student loans
Second, Blunt says that President Joe Biden doesn't have the legal authority to enact wide-scale student loan cancellation without congressional authorization. Sen. Elizabeth Warren (D-MA) disagrees, noting that the Higher Education Act of 1965 granted the president (through the U.S. Secretary of Education) an unlimited power to cancel an unlimited amount of student loan debt for an unlimited amount of student loan borrowers. However, Blunt says you don't have to take his word for it. Speaker of the House Nancy Pelosi (D-CA) and Biden have said the president doesn't have unilateral authority to cancel student loans. Rather, Congress must pass legislation or otherwise authorize the president to act on student loan forgiveness.
3. Biden has shown no commitment to wide-scale student loan forgiveness
Third, Blunt notes that despite the rhetoric to cancel $10,000 of student loans for borrowers, the Biden administration hasn't prioritized wide-scale student loan cancellation. Yes, Biden has canceled $25 billion of student loans since becoming president. That student loan cancellation, however, has been targeted at specific borrowers, such as public servants or borrowers with a permanent disability. Blunt notes that Biden didn't include any request for wide-scale student loan cancellation in his most recent legislative budget. Last week, U.S. Secretary of Education Miguel Cardona met with Blunt and his colleagues on Capitol Hill to discuss the education budget, but it didn't include any student loan requests. There are several proposals for student loan forgiveness in Congress, but Blunt says that the president hasn't sent a proposal, which a friendly Democratic colleague could introduce and then the Senate can debate. While Democrats control the Senate, for example, Senate Majority Leader Chuck Schumer (D-NY) hasn't even brought wide-scale student loan forgiveness to the Senate floor to a vote.
Former House Speaker Glen Casada and aide indicted on bribery, kickback charges
Casada and Cothren entered not guilty pleas in court Tuesday; both were released
Former Tennessee House Speaker Rep. Glen Casada and his chief of staff were arrested at their homes by FBI agents Tuesday morning after a federal grand jury on Monday issued an indictment on 20-counts involving bribery, theft from programs receiving federal funds, kickbacks, conspiracy to commit money laundering and other charges, according to a news release from the US Department of Justice.
If convicted, each faces up to 20 years in prison.
Hours after their arrests, the pair appeared in a downtown federal courthouse in handcuffs. A deputy removed them. In the 30 minute hearing that followed, both men - represented by separate attorneys - pleaded not guilty to all charges against them.
"That is correct, your honor," said Casada, after attorney Jonathan Farmer said his client was "not guilty on all counts."
"Yes, your honor," Cothren said after his attorney Cynthia Sherwood said "not guilty" in response to Magistrate Alistair Newman's questions. Both men were released after agreeing to standard conditions that included not speaking with witnesses or victims and restrictions on travel.
The court appearance represented an extraordinary reversal of fortune for Casada, a Republican who rose to become one of the most powerful men in Tennessee politics. Elected to the Tennessee House in 2001 representing Williamson County, he ascended to the Speaker of the House position in 2019. But he served just 6 months, a tenure cut short by a no-confidence vote after racist and sexist texts emerged from his then former chief of staff, Cade Cothren - who is now Casada's codefendant.
Casada remains a state representative. It is unknown whether he will continue to hold his seat after the indictments.
The charges stem from a scheme to steer lawmakers into doing business with Phoenix Solutions, a consulting business Casada - then serving as the powerful Speaker of the Tennessee House - profited from and Cothren secretly operated. They told lawmakers the firm was run by an experienced political consultant named "Matthew Phoenix," who does not exist.
Four proposed amendments will appear on the November 8, 2022 ballot directly after the candidates for governor. For information on amendments being considered for the 2026 ballot, click here.
Proposed Constitutional amendments are presented as yes or no questions. A yes vote is a vote to amend the Constitution and adopt the proposed language in the amendment. A no vote is a vote not to amend the Constitution and keep the current language in the Constitution unchanged.
Two things must happen for an amendment to pass and become part of the Constitution. The first is the amendment must get more yes votes than no votes. The second is that the number of yes votes must be a majority of the total votes in the gubernatorial election. This longstanding process Tennessee uses to determine the result for proposed Constitutional amendments was confirmed by a court decision following the 2014 general election.
To determine the number of votes needed to adopt a proposed Constitutional amendment, votes for all candidates for governor are added together and then divided by two. If there are more yes votes than no votes on the proposed amendment and the number of yes votes exceeds 50%+1 of the total votes for governor, the amendment passes and becomes part of the Constitution. The Constitutional amendment fails if the number of yes votes does not meet or exceed the threshold, or if there are more no votes than yes votes.
The current language of the Tennessee Constitution can be found in the online edition of the Tennessee Blue Book. The Attorney General has provided summaries for each amendment to be placed on the ballot. For questions, please call 1-877-850-4959.
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